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If you suffer from ‘decision paralysis’ try looking at the options from a different perspective. For instance, if you are trying to decide between different stocks or funds, imagine that you already own them all. Your decision then becomes one of rejection (“which one am I least comfortable owning?”) rather than of selection, and you may find this helps.

      4. All numbers count, even if you don’t like to count them.

      The tendency to dismiss or discount small numbers as insignificant - the ‘bigness bias’ - can lead you to pay more than you need to for brokerage commissions and fund charges. Over time, this can have a surprisingly deleterious effect on your investment returns. Avoid this ‘bigness bias’. Count all the numbers.

      5. Acknowledge the role of chance.

      A failure to fully grasp the role that chance plays in life leads many investors to be overly-impressed with short-term success and other random or unusual occurrences. Thus, many investors pour money into mutual funds that have performed well in recent years under the mistaken belief that the funds’ success is the result of something other than dumb luck.

      6. Your confidence is often misplaced.

      Nearly everyone falls prey, at some time or another, to an overestimation of their knowledge and abilities. Most dangerous for investors is the delusion that, with a little knowledge or homework, you can pick investments with better-than-average success. In reality, there is little reason for even the most sophisticated investor to believe that she can pick stocks - or mutual funds - better than the average man or woman on the street.

      7. It’s hard to admit mistakes.

      This sounds basic, but we’re not talking about pride so much as the subconscious inclination people have to confirm what they already know or want to believe. Because of this ‘confirmation bias’ it’s important to share your financial decisions with others - seeking not only specific advice, but also critiques of your decision-making process.

      8. The trend may not be your friend.

      In the long term, conventional wisdom is often on target - as it has been over the past 25 years in the trend away from fixed income investments towards stocks. In the short run, however, the vagaries of crowd behavior - particularly ‘information cascades’ that result in dramatic shifts in tastes and actions - frequently lead to costly overreactions and missed opportunities. Treat trends and fads with skepticism and caution.

      9. You can know too much.

      Knowledge is power, but too much ‘illusory’ information can be destructive. Studies have shown that investors who tune out the majority of financial news fare better than those who subject themselves to an endless stream of information, much of it meaningless.

      10. Don’t check your investments too regularly.

      The less frequently you check on your investments, the less likely you’ll be to react emotionally to the natural ups and downs of the securities markets. For most investors, a yearly review of their portfolios is frequent enough.

      ‘There is no such thing as a ‘hold’ decision. If you wouldn’t buy the stock again today, assuming you had additional money, you should either sell, or admit that you are confused.’

      Robert V. Green

      Bruce Berman

      Bruce Berman is president and principal owner of Brody Berman Associates, Inc., a consulting firm for positioning intellectual property owners, advisors and investors.

      Over the past 15 years Mr. Berman has acted for technology-based companies, m&a candidates, licensing departments and consultants, investment bankers, investment partnerships, owners of branded products, and law firms. Mr. Berman has taught at CCNY, Columbia University and Sir George Williams University, and is a member of the financial markets committee of the Licensing Executives Society (L.E.S.).

      Books

       Hidden Value: Profiting from The Intellectual Property Economy

      Euromoney Institutional Investor, 1999

      Making Innovation Pay: People Who Turn IP Into Shareholder Value, John Wiley & Sons Inc, 2006

      Understanding the value of patents

      Introduction

      Patents are rights granted to inventors by governments. Owners of patents, or their assignees, are awarded a period of exclusivity in exchange for giving whoever wants to look a glimpse of how their invention works.

      While frustrating to some, these restrictions stimulate innovation. Without patents, competitors would simply copy innovations made by others, thus destroying the advantage of doing R&D. This is called the ‘free-rider’ problem. Free-riders reduce the level of R&D, a socially unacceptable and potentially dangerous outcome. Patent protection gives companies the confidence to spend R&D dollars on innovations which could otherwise be easily copied.

      Intellectual property (IP) investors include a diverse range of stakeholders: senior management, money managers, investment bankers, universities and individuals. IP rights, business performance and market value are inextricably bound. Smart companies innovate. Really smart companies innovate, protect and leverage IP assets for performance, profit and shareholder value.

      1. Not all patents are assets.

      A patent is merely a right to defend an invention, even if it has no value. Many companies are using techniques for increasing R&D efficiency and patenting strategy, and aligning them with business objectives. While it is good to have many patents (IBM secured more than 2,800 U.S. patents in 2000), it is far better to have the right patents. Seven of the top ten recipients of U.S. patents are companies based outside of the U.S.

      2. It is relatively easy to secure a patent - but difficult to predict its future value.

      Most patent agents can get a patent to issue on almost any invention. Even a ‘hairy fuzz ball’ is patentable if the claims are adjusted to comply with patent office requirements that the invention covered be non-obvious and novel.

      However, this does not mean the patent is or will be worth anything, or that it will survive costly legal challenges. Good legal advisors can determine the likely strength of a patent, even if it is difficult to predict its future value.

      3. One patent strategy does not fit every business.

      Approaches to attaining strong patent position tend to differ by industry. Pharmaceutical companies, for example, spend a lot of money securing relatively few expensive patents. Pharma company patents tend to be associated with product ‘home runs’ (ViagraTM, ProzacTM, ClaritinTM, etc).

      Conversely, groups of overlapping patents that cover a product or products and establish patent ‘fences’ are common in the semiconductor industry.

      4. Licensing royalties help some companies to compete.

      Companies can generate high-margin income by licensing their technology or inventions to non-competitors and, in some instances, even competitors.

      Income from technology licenses can be extremely rewarding. Qualcomm, for example, which has decided to manufacture less and license more, may be a model for technology companies that want to cash in quickly on key technologies (like CDMA wireless) which may have a short shelf life.

      5. Under or mis-exploited

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